Reply To: Possible repossession


Sorry Mirador, this is just an overview of how the Spanish law deals with mortgage arrears and possession cases.
The terms are approximate, it depends of the Court

FIRST STAGE the borrower falls into arrears
At this stage the lender try to contact the borrower to get an explanation about the arrears and start to charge extras such as different interest rates an penalties. Mortgage lenders also attempt to renegotiate alternative arrangements

SECOND STAGE In default. 90 days after the first arrear
Lender’s debt collection department try the last attempt to recover the debt

THIRD STAGE 10-30 days after default
A duly attested summon (Requerimiento Notarial) or certified fax must be sent from the lender to the borrower informing about possession proceeding through the court

FOURTH STAGE Repossession order .One week after the summon. Legal action start against the borrower
The lender’s lawyer try to obtain a executory judgment for the payment of the overdue mortgage and by public auction the mortgage property will be sold.

FIFTH STAGE The Court set a date for public auction 4-16 months after the legal action start.
If nobody bids, the lender will be the new owner of the house for 50% of the property value.
I have to say that the borrower always owe to the bank much more money than the property value. It must be added interest of arrears, demurrage, court costs etc. Although the house has been sold the borrower is still owing a lot of money so the lender will keep pursuing.
If you have a guarantor the lender will start the proceedings against him in order to obtain the rest of the debt.
The new owner of the property is registered in the Land Registry.

SIXTH STAGE Eviction 6 months after the auction
Police Court, officers and a locksmith will evict the borrower. It is very difficult to evict if there are tenants or children and this circumstance is previously notified in the Land Registry. For example divorced couple own the house and one day none of them pay the mortgage. If when they got divorced they submitted in the Land Registry that use the house would be for the spouse and the children the situation is that is quite impossible to evict the family but the debt remains